Holley obtained his Ph.D. in organic chemistry from Cornell University, Ithaca, N.Y., in 1947. He investigated a variety of biochemical questions at the state and federal agricultural experiment stations at Cornell (1948–64). He began his research on RNA after spending a year studying with James F. Bonner at the California Institute of Technology (1955–56).

By 1960 Holley and others had shown that small molecules of ribonucleic acids, called transfer RNAs, were involved in the assembly of amino acids into proteins. Holley and his collaborators developed techniques to separate the different transfer RNAs from the mixture in the cell. By 1965 he had determined the composition of the transfer RNA that incorporates the amino acidalanine into protein molecules. This feat—the first determination of the sequence of nucleotides in a nucleic acid—required digesting the molecule with enzymes, identifying the pieces, then figuring out how they fit together. It has since been shown that all transfer RNAs have similar structures.

In 1968 Holley became a resident fellow at the Salk Institute for Biological Studies in La Jolla, Calif. He also became an adjunct professor at the University of California, San Diego, in the following year.